16 June 2004 00:00
Yukos shares plunge amid fresh bankruptcy fears
ByLine: By ANDREW JACK
Shares in Yukos fell to their lowest level in 30 months yesterday on fresh
fears that the oil group could be driven into bankruptcy.
The falls followed reports that the Russian government had rejected the
group's attempts to settle its long-running dispute over unpaid taxes.
Yukos shares closed down 8 per cent at Dollars 6.20, dragging Russia's
stock market to a low for the year. The RTS index dropped more than 4 per
cent.
"Over the past two years, the key to Russian growth has been investment
by dedicated global funds . . . they are deciding they don't want
exposure," said Paul Collison, oil analyst at Brunswick UBS, a Moscow
brokerage.
A criminal trial begins today against Mikhail Khodorkovsky, Yukos's
former chief executive and largest shareholder, and Platon Lebedev, his
business partner, on charges of fraud and tax evasion totalling nearly
Dollars 2bn (Euros 1.64bn). Yukos also faces an appeal this Friday against a
Dollars 3.4bn additional tax bill for 2000, which it has warned could trigger
insolvency unless the court lifted an order preventing it from selling
assets.
Yukos managers said they had submitted proposals to the government on ways to
pay the bill, including issuing new shares, raising extra loans or selling
company assets to top up current cash of just Dollars 800m. Vedomosti, the
Financial Times' sister newspaper in Russia, reported that the ideas had
been rejected.
Yukos also increased its debts by Dollars 1.25bn during the first quarter of
the year, in a move that may help its majority shareholders strengthen their
negotiating position if the company goes bankrupt, a Moscow analyst said.
Steven Dashevsky, at Aton, said Yukos had doubled to Dollars 2.5bn its loans
from Yukos Capital of Luxembourg, on top of Dollars 3bn made last year to
Yukos Mordovia, two connected companies. Added to an extra Dollars 1.6bn lent
to Yukos by Menatep, the debts could significantly add to the
shareholders' influence in bankruptcy proceedings.
Separately, Menatep, through which Mr Khodorkovsky and his partners control
Yukos, is believed to be considering handing some of its shares to the
government in settlement of the tax claims. The move would dilute
Menatep's 44 per cent stake, which is subject to a court freezing order,
opening the way to the government taking significant equity or selling it to
another group.
The ideas represent the latest apparent signs of willingness to negotiate
with the Russian authorities by Mr Khodorkovsky and his company, which appear
to have been rebuffed. Editorial Comment, Page 14 Russian in the dock, Page
15 Lex, Page 16 Market Insight, Page 34
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